CAN PUBLIC-PRIVATE PARTNERSHIPS SOLVE CENTRAL ASIA’S CHALLENGES?
Creating Water Purification Systems for Disaster Response: A Case Study
National, state and local governments frequently face complex problems that require cost effective and efficient solutions that are often constrained by both time and fiscal pressures. Government best practices developed and implemented in the US Federal government can be used to leverage marketing and purchasing power to rapidly increase the deployment of a wide range of technologies, products and/or services to the benefit of the people/taxpayers of a country, regional or local government.
Most government entities do not recognise, let alone leverage, their true market attractiveness to the private sector. Experience has shown that the private sector is ready, willing and able to assist the government if they are provided two things—neither of which are money. The first deals with the ability to articulate in a clear and concise way what a given problem is (through the use of detailed operational requirements) and the second is a conservative estimate of the potential available market. Recently developed models and programs, such as the System Efficacy through Commercialization, Utilization, Relevance and Evaluation (SECURE) program at the US Department of Homeland Security (DHS) can substantially increase their awareness of a worldwide spectrum of solution providers in a broad range of industries. The SECURE program is an ideal process for leveraging the potential available market represented by users of products and services germane to communities across the United States.
The real challenge for federal, state and local government officials is to work as a group to prioritise and articulate the unsatisfied needs/wants of their particular region(s). A recent effort to identify potential solutions that will assist communities recover from natural or manmade disasters will be shared in detail to demonstrate how innovative public-private partnerships work. Government officials and first responders realize that providing potable water to affected communities is one of the most important functions to restore after a disaster. These same officials also recognise significant shortcomings with traditional water delivery methods, such as trucking in bottled water or operating large, diesel-powered water purification systems.
DHS, through utilization of its SECURE program, has aided several state and local government officials by developing detailed operational requirements, concepts-of-operations and a conservative estimate of the potential available market (PAM) for products/services needed collectively by communities at the local, tribal, state and federal levels. This program ensures that public officials work closely with the private sector through partnership models like the SECURE program to obtain the highest performance/price products and/or services– at a speed-of-execution not typically seen in the public sector.
Private-Public Partnerships are the Future
A public-private partnership is an agreement between a public agency and a private sector entity that combines skills and resources to develop a technology, product and/or service that improves the quality of life for the general public. The private sector has been called upon numerous times to use its resources, skills and expertise to perform specific tasks in support of the public sector. Historically, the public sector has frequently taken an active role in spurring technological advances by directly funding the private sector to fulfil a specialised need that the public sector cannot complete itself.
The public sector has found it necessary to take this active role to lead and enable the development of a needed technology or capability in situations where the business case for the private sector’s investment in a certain area is not apparent. In these cases, the public sector relied on the private sector to develop mission-critical capabilities, but had to pay the private sector to divert its valuable (and limited) resources to an area that did not necessarily show a strong potential to provide an acceptable return-on-investment (ROI) for a given company. These situations could be caused by a number of issues ranging from a high cost to perform the research and development (R&D) to a limited PAM that may have prevented the company from making sufficient profit and returns to the company and its shareholders.
Increasingly, however, users in the public sector are now viewed as stable markets – i.e., a sizeable enough customer base for the private sector to warrant investments of time and money. A commercialisation-based public-private partnership has the same goal as more traditional public-private partnerships, but the method is constructed to leverage positive attributes of the free market system. The introduction of a commercialization-based public-private partnership, developed and implemented at DHS, provides benefits for three constituents of the Homeland Security Enterprise (HSE): the private sector, the public sector and the taxpayer. This is a desirable scenario creating a “win-win-win” environment in which all participants are in a position to benefit.
In the free market system, private sector companies and businesses must commercialise and sell products and services that consumers want to purchase. The development and understanding of specific markets is a critical undertaking for many companies seeking to gain share of a market, with companies directing significant amounts of money and resources to these activities in addition to its product development efforts. Sometimes companies do not understand the correct needs or demand data of a market or market segment and their product(s) does not sell well.
What a commercialisation-based public-private partnership offers to the private sector is detailed information and opportunity. The public sector is not only the “consumer” in this free market scenario, but an informed and communicative consumer who is capable of giving the private sector a detailed description of what they need, as well as insight into which agencies and user communities would be interested in potentially purchasing a product/service that fulfils these requirements. While it remains prudent business to verify the information provided by the public sector, there is considerable value for the private sector to obtain these details from DHS because four things are provided to the private sector that would not happen in normal market dynamics: 1) a decrease in resources spent researching the market; 2) an increase in available time and money that can now be focused on product design and manufacturing; 3) a reduction in risk of the research data being incorrect; and 4) a conservative estimate as to how large the potential market can be for a known and funded entity.
The development and communication of detailed requirements or needs is the real cornerstone to the success of these public-private partnerships. The public sector’s ability to articulate the needs of its stakeholders will catalyse and support the future actions of the partnership. Understanding requirements early in the search for solutions removes a great deal of guesswork in the planning stages and helps to ensure that the end-users and product developers are “on the same page.”
Transformational Change beyond DHS
Because of its obvious benefits, it is reasonable to examine the possibility of extending the concepts developed at DHS to other countries’ national, state, local and tribal agencies. Logic dictates that in cases where operational requirements can be developed across agencies, the size of a given potential available market would increase. It is also certainly conceivable that various agencies across government share similar requirements for products and services. Further expanding requirements generation and collecting information on market potential across all of government can have transformative effects on the way government conducts business. The incorporation of commercialisation adds a “valuable tool to an agency’s toolbox” in providing increased speed-of-execution in deploying technologies/products/services to solve problems, as well as providing an increase in the net realizable budget of an agency. In fact, the expansion of public-private partnerships like SECURE across all of government are being recommended to both the President of the United States and Congress due to their many benefits. It should be noted that these principles are now being applied in innovative programs like MUNIS in Uzbekistan, as well as FPIP in Kazakhstan.
This article would not have been possible without the steadfast assistance of my former colleagues at the White House and US Department of Homeland Security. In addition, I thank all those I have, and continue to work with, across Central Asia who are applying these proven models in countries like Kazakhstan and Uzbekistan.
by H.E. The Hon., Dr. Thomas A. Cellucci, MBA